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I think I want to disagree with the central point of the article here: As a payment mechanism, Bitcoin is final. As a store of value, it isn't unseizable. But f

I think I want to disagree with the central point of the article here: As a payment mechanism, Bitcoin is final. As a store of value, it isn't unseizable. But from a technical PoV, they still had to make a new transaction in order to reverse the effects of the old one. I want to clarify that this isn't just a technical point: if I have $100 in account A, and I use a card processor to move it to account B, and then the holder of that account withdraws it, then the card processor can still reverse the transaction, leading B with a debt of $100. (This is actually a common scam: you send someone $1000 with a 'soft' payment method, like a check, then you have them buy gift cards and send the codes. Once the check bounces, you split.) If I do the same thing in Bitcoin, that's not possible. If Bitfinex hackers had used Bitcoin qua payment processor to move $70MM, then exchanged the Bitcoin into something else, the Bitcoin transaction could never have been reversed. Only the custody, which is a different thing.

lxgr 5y ago
The distinction is certainly one worth making (reversibility within the ledger vs. "meta-reversibility" in the context of the social/legal system that ledger is embedded), and not just at an academic level as underlined by your example. In my view, both matter when trying to understand a payment system.
- yanmaani 5y ago
  I don't understand - how is the custody even part of the payment system, though? For example, if I keep all my money in the bank, then cash is only as reversible as my bank account is solid. But "cash as a payment method is reversible, if you store the proceeds in a bank account" is not a statement that tells you anything about cash, it's a statement about my bank account. It would be a solid article if it attempted to argue the point it proves, which is that "there is no such thing as unseizable". But it doesn't, so it isn't.
wpietri 5y ago
You're right about the technical distinction, but I think you're incorrect that Bitcoin is truly final. Bitcoin may not have reversed a transaction yet, but it's technically feasible. Note that Ethereum did it: https://futurism.com/the-dao-heist-undone-97-of-eth-holders-vote-for-the-hard-fork https://futurism.com/the-dao-heist-undone-97-of-eth-holders-... Bitcoin mining is very concentrated, so if one or more of the major miners is robbed, it's entirely plausible that similarly situated entities would collaborate and just undo the transaction.
- beaned 5y ago
  Is it that concentrated? People used to criticize that it was concentrated in China, and then that changed basically overnight when mining was shut down the. Now people still say this but how much is it true?
- opportune 5y ago
  But as the article notes this was actually a hard fork off the chain known up to that time at Ethereum. It’s really just semantics that the old chain became known as Ethereum Classic and the hard-forked chain maintained the name of “Ethereum” due to the active developers and most of the community choosing to use the hard fork. The payment was still never actually reversed on Ethereum Classic. And that blockchain exists to this day. Sure, the amount of the not-actually-reversed transaction has lost value in $ at mark-to-market but it’s still the same amount of ether on the same blockchain as it’s always been. In that sense a better term is that the payment was rejected by the community, or routed around, rather than reversed IMO.
  - mLuby 5y ago
    That Ethereum Classic never reversed is true but largely meaningless; what matters, as you say, is that "the not-actually-reversed transaction has lost value in $ at mark-to-market." That loss in value represents the reversal. If that hadn't happened, the original and fork could be double-spent.
    - opportune 5y ago
      The difference in value of ETH classic and ETH grew over time though. It hasn’t always been so stark. I don’t care enough about the specifics of the “bad” txs to check when/if the funds were sent out of the receiving wallets but they might have recovered the same or similar amount of value in $. Anyway, I just find this a really bad example in general because it’s 1 an exceptional case, most other hard forks haven’t been done just for transactions 2 it required almost the entire community to choose to follow the hard fork (which is the only thing that actually destroys value). Yes, it does show that you can do something like a payment reversal in crypto but it’s very hard and unlikely. In this case the exception proves the rule
gojomo 5y ago
Indeed, ~patio11 has glossed over the distinction between ‘definitely reversible’ & ‘possibly recoverable’ here - which can be a salient difference.
wewtyflakes 5y ago
I think the sentiment of the article was that all of these technical details and nuances are ultimately irrelevant to governments that control armies. Those government can even legislate ridiculous things (https://en.wikipedia.org/wiki/Nix_v._Hedden https://en.wikipedia.org/wiki/Nix_v._Hedden).
- EdwardDiego 5y ago
  Huh, they legally enforced the old saying "intelligence is knowing that a tomato is a fruit, wisdom is not putting tomato in a fruit salad".
olalonde 5y ago
> it isn't unseizable It can be, with a memorized seed phrase and some willpower. I'm still amazed that the technically inclined Bitfinex hackers managed to get their wallet seized.
- noah_buddy 5y ago
  What's the xkcd... Something something, $15 dollar wrench? The application here is this: We (the US govt) know you (the hackers) did it. Cough up the cash and go to prison for a long time or don't and go for much much longer. Suddenly, the money is seized. That said, there are arguments to be made about that money as a bargaining chip if you keep the wallets 'unseizable' (until you cough it up for an offer).
  - olalonde 5y ago
    I specifically included "some willpower" because I knew someone would bring that up. Technically, if you stand your ground and go to prison for a long time (or are going to prison for a long time regardless), the money won't be seized. Similarly, if you forget your passphrase or die, the money won't be seized. Or if you have a multisig wallet setup and your accomplices don't get caught, the money won't be seized. I believe there are multiple actual instances of the FBI not being able to seize rather large Bitcoin wallets.

lxgr 5y ago

The distinction is certainly one worth making (reversibility within the ledger vs. "meta-reversibility" in the context of the social/legal system that ledger is embedded), and not just at an academic level as underlined by your example. In my view, both matter when trying to understand a payment system.

yanmaani 5y ago
I don't understand - how is the custody even part of the payment system, though? For example, if I keep all my money in the bank, then cash is only as reversible as my bank account is solid. But "cash as a payment method is reversible, if you store the proceeds in a bank account" is not a statement that tells you anything about cash, it's a statement about my bank account. It would be a solid article if it attempted to argue the point it proves, which is that "there is no such thing as unseizable". But it doesn't, so it isn't.

wpietri 5y ago

You're right about the technical distinction, but I think you're incorrect that Bitcoin is truly final. Bitcoin may not have reversed a transaction yet, but it's technically feasible. Note that Ethereum did it: https://futurism.com/the-dao-heist-undone-97-of-eth-holders-vote-for-the-hard-fork https://futurism.com/the-dao-heist-undone-97-of-eth-holders-... Bitcoin mining is very concentrated, so if one or more of the major miners is robbed, it's entirely plausible that similarly situated entities would collaborate and just undo the transaction.

beaned 5y ago
Is it that concentrated? People used to criticize that it was concentrated in China, and then that changed basically overnight when mining was shut down the. Now people still say this but how much is it true?
opportune 5y ago
But as the article notes this was actually a hard fork off the chain known up to that time at Ethereum. It’s really just semantics that the old chain became known as Ethereum Classic and the hard-forked chain maintained the name of “Ethereum” due to the active developers and most of the community choosing to use the hard fork. The payment was still never actually reversed on Ethereum Classic. And that blockchain exists to this day. Sure, the amount of the not-actually-reversed transaction has lost value in $ at mark-to-market but it’s still the same amount of ether on the same blockchain as it’s always been. In that sense a better term is that the payment was rejected by the community, or routed around, rather than reversed IMO.
- mLuby 5y ago
  That Ethereum Classic never reversed is true but largely meaningless; what matters, as you say, is that "the not-actually-reversed transaction has lost value in $ at mark-to-market." That loss in value represents the reversal. If that hadn't happened, the original and fork could be double-spent.
  - opportune 5y ago
    The difference in value of ETH classic and ETH grew over time though. It hasn’t always been so stark. I don’t care enough about the specifics of the “bad” txs to check when/if the funds were sent out of the receiving wallets but they might have recovered the same or similar amount of value in $. Anyway, I just find this a really bad example in general because it’s 1 an exceptional case, most other hard forks haven’t been done just for transactions 2 it required almost the entire community to choose to follow the hard fork (which is the only thing that actually destroys value). Yes, it does show that you can do something like a payment reversal in crypto but it’s very hard and unlikely. In this case the exception proves the rule

gojomo 5y ago

Indeed, ~patio11 has glossed over the distinction between ‘definitely reversible’ & ‘possibly recoverable’ here - which can be a salient difference.

wewtyflakes 5y ago

I think the sentiment of the article was that all of these technical details and nuances are ultimately irrelevant to governments that control armies. Those government can even legislate ridiculous things (https://en.wikipedia.org/wiki/Nix_v._Hedden https://en.wikipedia.org/wiki/Nix_v._Hedden).

EdwardDiego 5y ago
Huh, they legally enforced the old saying "intelligence is knowing that a tomato is a fruit, wisdom is not putting tomato in a fruit salad".

olalonde 5y ago

> it isn't unseizable It can be, with a memorized seed phrase and some willpower. I'm still amazed that the technically inclined Bitfinex hackers managed to get their wallet seized.

noah_buddy 5y ago
What's the xkcd... Something something, $15 dollar wrench? The application here is this: We (the US govt) know you (the hackers) did it. Cough up the cash and go to prison for a long time or don't and go for much much longer. Suddenly, the money is seized. That said, there are arguments to be made about that money as a bargaining chip if you keep the wallets 'unseizable' (until you cough it up for an offer).
- olalonde 5y ago
  I specifically included "some willpower" because I knew someone would bring that up. Technically, if you stand your ground and go to prison for a long time (or are going to prison for a long time regardless), the money won't be seized. Similarly, if you forget your passphrase or die, the money won't be seized. Or if you have a multisig wallet setup and your accomplices don't get caught, the money won't be seized. I believe there are multiple actual instances of the FBI not being able to seize rather large Bitcoin wallets.